I have written earlier about @BrahmaFi as a project I am fascinated by. Mainly because of the unique way in which they gate their vaults to sophisticated wallets
Today I will talk about how they are offering leveraged farming/staking using @GearboxProtocol
Today, to use #Gearbox, you need to borrow min 100k/75E. So, to run a safe stablecoin farm (~20% returns on Convex Curve sUSD), you need at least 18k to prevent liquidation (safe until sUSD>0.95)
For safe stEHT strategy, you need even more collateral (~30k) for min borrow
That is a lot of money! Enter #BrahmaFi!
Their TopGear vault takes FRAX as input, and uses Gearbox leveraged ETH staking
Recent analysis shows that their vault returned an equivalent of 20% APR although part of that is because of the time when they entered the position
So do not expect those returns going fwd
Right now, their vault leverages 3.6x which gives a return of ~6% in gearbox with liquidation if stETH falls to 0.957ETH
Returns depend on stETH apy, gearbox borrow rate (currently high IMO at 3.5%, variable), and leverage
Personally, I think the leverage is a bit conservative. But it does mean that principal is quite safe from liquidation
In addition, the vault also earns GEAR rewards (0.3%, varies). BrahmaFi plans to use these to subsidise vault entry gas fee
Also keep in mind that
1. withdrawals are processed in a month
2. 10% performance fee + 0.5% withdrawal fee
The vault of ~$570k is currently full but I hear they plan to increase by 150k on Monday
They are also building something new to connect with different products. Alpha signups happen in a week or so. So keep an eye out 👀
BrahmaFi does not have a #token yet. Investing in their vaults increases your #karma points which may impact your #airdrop if they ever do one
Note: I too may get additional karma points for this tweet thread
Although Gearbox borrow rates are variable, they do tend to keep them reasonable until their liquidity utilisation hits 80%+
That gives some assurance (although not a guarantee I guess) that borrow rates will not eat up all the returns
Finally, @GearboxProtocol @BrahmaFi can you confirm that the TopGear vault liquidation does not depend on ETH price?
Also feel free to add to the above to clarify/explain better